City Beat

News, insight and discussion on Sacramento and its neighborhoods

April 3, 2012
With feud simmering, Sacramento council vote on arena begins

Amid an acrimonious backdrop at City Hall, the Sacramento City Council has begun a meeting at which it will decide whether to move ahead with crucial pre-development work needed for a new downtown sports arena.

Live Twitter updates from The Bee's arena team: City Council arena vote

While the council is expected to approve the work, members of the council are also expected to voice frustration with the family that owns the Sacramento Kings over a dispute regarding who will cover the pre-development costs.

Mayor Kevin Johnson voiced his own anger earlier today, when he lashed out at the Maloof family during a press conference, calling their statements that the family never agreed to pay for pre-development costs of a new arena "disingenuous." The mayor also accused the Maloofs of "tactics and antics that are not becoming of a true partnership."

"We as a city can't be jerked around," he said. "We can't keep having this issue flare up."

Johnson then indicated he wants the issue resolved by next week.

The NBA team owners will meet in New York next week, when league Commissioner David Stern is expected to raise the issue of the Maloofs' pre-development contribution. Asked if the city would seek new ownership for the team should the Maloofs continue to balk in New York, the mayor said, "We're not going to be a city that sits on its hands."

"Do we need to look at contingency plans? Absolutely," he said.

While the mayor would not elaborate, billionaire Ron Burkle has expressed interest in purchasing the Kings. The Maloofs, however, have insisted they have no intention of selling.

Eric Rose, a spokesman for the family, issued the following statement today:

"As we have said numerous times, the Kings long-standing position has been that the team would be a tenant in an arena owned by the city and managed by AEG. Pre-development costs are not the responsibility of the tenant. Moreover, the City had asked the Kings to reimburse AEG for their contribution and we find that extremely unfair. We do not understand how the city and the Mayor could claim that are unaware of our position.

"The Kings' commitment to the arena construction has not changed. We do not understand Mayor Johnson's frustration, and instead of projecting, we hope that the Mayor and city leaders will address the various issues that we have brought to their attention. We need the City to demonstrate to us that they can meet their own timeline of having a new arena built in time for the 2015 basketball season.

In a letter to Sacramento city officials Monday, an attorney for the Maloofs said the team owners have serious doubts whether the city can succeed in getting a downtown arena built by September 2015, the opening date the NBA has said it wants.

Attorney Scott Zolke challenged the city's efforts on numerous fronts, notably citing a planned initiative drive by a group called STOP seeking to force the arena financing to a public vote.

"The fact that this initiative drive is occurring makes it impossible for the city to provide current assurances that its funding plan is feasible," Zolke wrote to the city.

The mayor has said he does not believe the petitioners will be able to qualify for the November ballot. The group, which got the go-ahead Monday to launch its drive, has until late May to gather an estimated 30,000 signatures.

In his letter to the city, Zolke also challenged the city's ability to get an environmental impact report completed in time to start arena construction next year. Zolke also challenged the city on traffic issues, and the potential that the project would dig up historic items in the ground, causing construction delays.

Zolke concluded: "We look forward to having further discussions with you about these and other issues, such as design, financing, parking distances and whether residents would view the parking rate increases as modest."

Meanwhile, Johnson and the City Council are expected to vote tonight to move forward tonight with crucial pre-development work on the arena. The first stage of the work - about two weeks - will be funded by $200,000 fronted by Stern. City officials said they will spend none of their own money until the Maloofs agree to pay their share.

Under a non-binding arena financing term sheet approved by the council last month, the city would eventually chip in $6.5 million of the $13 million pre-development costs. The Kings agreed to contribute $3.2 million, as did AEG, the company signed to operate the arena.

But Kings co-owner George Maloof has disputed that arrangement, saying his family never agreed to pay the pre-development costs. He said it would be unfair for the team to cover those costs because it will be a tenant - not owner and developer - of the arena.

Those statements are clearly frustrating the mayor. Asked if he thinks the Maloofs are willing to follow through on their pledge to help fund the arena, he said their statements lately have "caused me pause, to be honest and to put it mildly."

"I expect them to honor their agreement," he said.

Johnson would not speculate whether the Maloofs' finances are playing a role in their decision not to pay the pre-development costs.

"It's not adding up from my vantage point," he said. "I've been dumbfounded."

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About City Beat

Ryan Lillis has covered the city of Sacramento, its 108 neighborhoods and its politicians since 2008. Prior to that, he covered crime at The Bee. A native of upstate New York, Lillis has a journalism degree from the University of California, Berkeley.

Contact reporter Ryan Lillis at rlillis@sacbee.com

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